Correlation Between Barings BDC and CCSB Financial

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Can any of the company-specific risk be diversified away by investing in both Barings BDC and CCSB Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Barings BDC and CCSB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and CCSB Financial Corp, you can compare the effects of market volatilities on Barings BDC and CCSB Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Barings BDC with a short position of CCSB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and CCSB Financial.

Diversification Opportunities for Barings BDC and CCSB Financial

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between Barings and CCSB is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and CCSB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCSB Financial Corp and Barings BDC is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Barings BDC are associated (or correlated) with CCSB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCSB Financial Corp has no effect on the direction of Barings BDC i.e., Barings BDC and CCSB Financial go up and down completely randomly.

Pair Corralation between Barings BDC and CCSB Financial

Given the investment horizon of 90 days Barings BDC is expected to generate 0.39 times more return on investment than CCSB Financial. However, Barings BDC is 2.54 times less risky than CCSB Financial. It trades about 0.07 of its potential returns per unit of risk. CCSB Financial Corp is currently generating about 0.0 per unit of risk. If you would invest  774.00  in Barings BDC on October 11, 2024 and sell it today you would earn a total of  163.00  from holding Barings BDC or generate 21.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Barings BDC  vs.  CCSB Financial Corp

 Performance 
       Timeline  
Barings BDC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Barings BDC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Barings BDC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
CCSB Financial Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CCSB Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Barings BDC and CCSB Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Barings BDC and CCSB Financial

The main advantage of trading using opposite Barings BDC and CCSB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, CCSB Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CCSB Financial will offset losses from the drop in CCSB Financial's long position.
The idea behind Barings BDC and CCSB Financial Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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